For Employers

There’s a Lack of Talent to Succeed Accounting Firms Because the Talent Doesn’t Exist

A recent survey of accounting firm partners from the CPA Consultants' Alliance found that over half of respondents (51.7%) said procrastination or denial was a primary cause for firms' succession troubles. Another 48.3% of respondents also said that "Lack of future leadership talent" was a primary cause of succession issues.

So, some firms have better things to do, some firms are sticking their heads in the sand and some firms lack the "bench strength."

The "leadership talent" that these firms want does not exist. It's a figment of their imagination. As soon as the current leadership accepts that, they can start making their firms relevant again and then maybe some potential successors will start appearing.

Well, how about the fact they allow droids with no business skills to assess the business skills of more junior personnel ? That will never have a good ending.

IndenturedServant

Answer: nobody wants to be partner.

McValue Meal Audit

You must give someone a reason to stay. The only way to stay in public is if you keep your head buried in the sand and ignore job opportunities… I had colleagues that did this which I never understood. I left after a little under 5 years of public for a 35% raise and better work. Good luck getting anyone to stay until you pay people an above market salary for the accounting industry as a whole, not just public.

Picsareawesome

Honestly, I can see what you’re saying about them using the old business model and it causing a lack of talent (i.e. work people to death and then most of them leave for better pay/hours in private).

But my question is: what would be a better model? We are a labor intensive profession partly because of regulations (both government and self-regulation) and I can’t say that most of these regulations are bad if you want to have a sound financial system. We are also a rather unpopular profession (not as “Sexy” as finance) which reduces our workforce. So what’s the answer? How do you retain good people? At this point compensation isn’t enough I’ve seen people leave for lesser paying jobs. And how would you reduce hours and increase your workforce?

N.E.R.D.

“And how would you reduce hours and increase your workforce?”

Adequately staff jobs. We all know many jobs are woefully understaffed because it’s an indirect way to force the rest of the team to pick up extra work. Slap a billable hour quota on there, and you have a recipe for unsatisfied workers who feel they are running up the clock on an engagement that could have been better split one or two more ways so that everybody could work reasonable hours.

However, hiring those extra bodies means less distributions for the partners, therefore it makes sense for the partners to just churn through the lower staff because it’s cheaper that way.

Shopisticated Investor 2015

Honestly, give workers instead of a work/life-fit or worklife balance. Let people spend time with family and friends and not just four weeks out of the year after working 55-65 hours a week.

Also a big no no for me personally (but no real choice bec of independence issues), the 401k match is shit and when you have millennials starting million dollar business through websites/apps and real estate (those opportunities seem much more fruitful than working in a storage closet working 65 hours week and seeing your pay per hour being as low as a McDonald’s worker

Another exKPMGer

This is because staff (including Seniors) are paid too much for their jobs. If you want to fix the problem, you have to pay everyone less, but that only works if you use the money you save to HIRE MORE PEOPLE. If you had pro-rata more staff on every job, you wouldn’t need all the extra hours, everyone would work a normal 8-5 then go home. But that’s too drastic of a change to suddenly throw at people. But it’s what it would take.

IndenturedServant

you should apply that logic to managers, senior managers, and partners too.

quite frankly, the shit that an audit senior manager does is not valuable enough to warrant 150k+.

Spectrum

I think 90% of the problem is that the current leadership is lacking in true leadership. If they were doing a good job engaging their employees by teaching them well, paying them competitively, staffing adequately and investing in really good continuing education that includes both leadership skills and technical skills, there wouldn’t be shortage. This is where the the old school Japanese model of business management comes in- you have to invest in the long term in order to profit in the long term. Partners in small firms, in particular, have been raping and pillaging every last dollar out of their businesses rather than putting long-term investment into their employees, and now it is coming back to bite them on the ass.